Schools dealing with less money than expected

July 5, 2004

Staff and Wire Reports

School districts across New Mexico say they are making do with less state money than expected this year by cutting positions and dipping into reserves, according to a survey conducted by the Albuquerque Journal.
Those cost-cutting measures come during a year in which the state increased its draw from a state permanent fund for public schools and other beneficiaries.
Almost all of the districts responding to the Journal survey said they didn’t get the anticipated state money to cover rising costs, even though lawmakers increased educational spending by 6 percent.
“It was a nightmare,” said Logan Municipal Schools Superintendent Carolyn Franklin. “We’re using all of our cash balance for things like mandated raises.”
Portales schools Superintendent James Holloway said funding issues have left his district with about $50,000 in reserves.
“We had close to $400,000 two years ago,” Holloway said.
Holloway said the district would be in even worse shape without staff cuts.
“In the two previous years I have reduced 13 staff members, nine teachers and four administrators,” Holloway said.
Holloway said Portales schools will be in danger of exceeding state-mandated student-teacher ratios if any more cuts have to be made.
He said much of the new money provided by the state was eaten up by state-mandated salary increases or can be used only for narrowly defined purposes.
“We do not have the option as Texas and some other states do of having local option taxes — 98 or 97 percent of our monies come from the state,” Holloway said. “When you’re mandating the raises and not getting the money to pay the raises, something has to go.”
Of the 53 school districts that responded to the newspaper’s survey, 68 percent said they had to use cash reserves, 51 percent cut jobs and 32 percent cut classroom budgets. In addition, 32 percent said they ordered hiring freezes and 28 percent had to skip the 2 percent employee raises recommended by the state.
The districts cited the rising costs of insurance, student tests, employee raises, fuel and utilities and state and federal mandates.
One former lawmaker said the state did its best doling out education money given available revenue. The state’s finance and administration secretary says part of the problem is districts have not changed their priorities to match new state and federal mandates.
Voters last fall narrowly approved a constitutional amendment to boost the annual payout from a state permanent fund to public schools and other beneficiaries.
Lawmakers appropriated nearly $58 million in permanent fund revenues for several school reform initiatives, including phasing in licensing systems with higher minimum annual salaries for teachers and educational assistants.
The annual payout from the state’s $7.5 billion Land Grant Permanent Fund to public schools increased from $296.6 million last fiscal year to an expected $349.8 million in the current budget year, said Charles Wollman, spokesman for the State Investment Council.
“The school districts are always crying, ‘Poor me, I never get enough money,”’ said former state Rep. Max Coll, D-N.M., who chaired the House Appropriations and Finance Committee before retiring this year.
He said school districts have faced bigger budget crunches in the past.
State Finance and Administration Secretary James Jimenez and state Secretary of Public Education Veronica Garcia called for an examination of the state’s public-school funding formula to ensure that it keeps pace with new initiatives.
“We’ve had kind of a sea change in our expectations,” Jimenez said.
Overall, school districts are scheduled to receive $112.8 million more in the 2005 fiscal year which began July 1 than they did in 2004. The 6 percent increase compares with a 4.4 percent increase last year and a 0.15 percent increase the year before.
Even so, 85 percent of the school districts that responded to the Journal survey said the extra money wasn’t enough to cover skyrocketing costs.
Coll and Secretary Garcia pointed out that local school boards have great latitude in setting their own budgets.
Garcia said some school districts brought budget shortfalls on themselves by choosing to surpass employee raises approved by legislators in previous years. Districts also used nonrecurring revenues, like reserves, to cover the raises, a recurring cost. Now that money is gone, she said.
Some districts with declining student enrollments have also failed to prepare for the accompanying drop in state dollars, Garcia said.
“If you don’t make those changes, that comes home to roost,” Garcia said.